Home ownership may seem like a milestone achievement of adulthood, but it’s not for everyone. Depending on your lifestyle, financial health, and wanderlust, there are multiple reasons why you shouldn’t sign up for this significant responsibility. In addition to being apprehensive about incurring maintenance costs and a mortgage, there are some clear signs you should wait to be a home owner.
Looking for an easy pay-off
Your home is not an asset. If you have to spend more than 30% of your income toward recurring payments on your property, you are putting your financial health at risk. Market fluctuations and financial crises can cause home values to plummet, or make selling a property difficult. It’s not always a bad thing to rent a property since home ownership can put you into a financial bind.
Scraping for a down payment
When purchasing a home, ideally you should be able to put down 20% for a reasonable mortgage payment. If your savings account is in poor shape and you don’t have enough money to avoid private mortgage insurance, skip purchasing the house. Your emergency fund is not for funding a home, and you should be able to handle expenses comfortably.
If you’re like Alice Merton and you got no roots, you shouldn’t buy a home. Some people live to travel the world, whether they work remotely or not. If you can’t commit to staying put in a set location for at least five years, tackling home ownership is not in your immediate future.
Sticker price aftershocks
When financing a home, it would be foolhardy only to consider the purchase price and ignore other hidden costs. Homes require you to have enough money to cover the mortgage, property tax, maintenance, insurance, and utilities. If you fail to consider your ability to pay for your home comfortably, you could risk hurting your credit and taking a hit to your wallet when something comes up.
Live more with less
Many homes are pretty large in size, despite the growing popularity of the tiny house movement. If you don’t want to deal with increasing maintenance costs for square footage, or you want to live out minimalist dreams, pass up on home ownership. Renting a smaller property with amenities can prove beneficial to your bank account and reduce living in excess.